I'm sure Michael's been told he'll get Walt back if Fake Henry is freed, and Ana Lucia got in the way of that, unknown to her. Libby's death was just an accident probably too, but I see Michael rolling around on the floor of the Hatch for when the Losties come back and he'll say Ana let Fake Henry out, he went on a rampage, etc etc.
Whether the Others DO actually give Walt back, I'd personally say no. They'll in my opinion see this as a victory in the whole "experiment" and let Michael cope with what he's done living on his conscience. Surely murdering two people makes him a bad person in their eyes, like Fake Henry said Ana was. He told her they wanted to work on her and change her, and maybe Michael's still gonna be in for that treatment now.
Hurley's gonna be gutted, but still it's the longest girlfriend he's probably had so far. V for Victorious!
It's gonna be interesting seeing how Michael interacts now with the survivors.